Business

Talks back on track, but Canadians drive a hard bargain in trade negotiations — stakeholders

Wednesday, March 26, 2014    

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AFTER a lengthy impasse, negotiations in the long-awaited Caricom-Canada trade agreement are back on track, but Canadian officials remain extremely tough, according to industry insiders.

Caricom and Canadian officials are in talks for a deal to replace the Caribbean-Canada Trade Agreement (CARIBCAN), a preferential arrangement under which most regional items enjoy duty-free access to the Canadian market, but which the World Trade Organisation (WTO) has ruled as unfair. Negotiations broke down last year due to a confluence of sticking points, including issues around market access.

CARIBCAN expired at the end of 2013, but with no deal on a reciprocal trade agreement, the parties received a short-term extension of the existing arrangement until the trading partners become WTO compliant. Caricom officials said recently that they expect the deal to be completed by June.

Speaking at this week's Observer Monday Exchange, Jamaica Manufacturers' Association President Brian Pengelley expressed optimism that a deal will be reached by the mid-year point.

"At one point both parties drew a hard line, but now there has been a coming together to make it work," Pengelley said. "I think we have to be hopeful that there is a deal by June."

However, Jamaica Exporters' Association (JEA) head Marjory Kennedy noted that the Canadians are being very tough in their bargaining and there still remains some contentious issues in terms of market access.

"We are going to have to try use our Diaspora to push the Canadian government to be a bit more lenient," Kennedy said.

The JEA president added that, because the region is negotiating as a group, there are differing interests across the different Caricom member states.

"So, it's a negotiation within ourselves and with the Canadians," she said.

A new trade agreement would avert a potentially serious fallout in the second largest market for Jamaica's food exports -- particularly rum, agroprocessed and baked products. Canada is one of the few countries the island traditionally enjoys a trade surplus with.

Lincoln Price, principal of local business support company Profit Drive and a former technocrat at the Office of Trade Negotiations of the Caricom Secretariat, warned last year of the impact on valuable export products if a new trade agreement doesn't come into effect and Canada is forced to charge duties. For instance, without a trade agreement, if Canada is forced to charge duties, it could add another 25c/litre to market access costs for Jamaican rum, as much as 11 per cent for pepper sauces, and 9.5 per cent for arrowroots and yams, he said.

Many top Jamaican firms could be impacted in the absence of a new agreement.

Canada is among GraceKennedy Limited's top five markets for exports from Jamaica, and hot sauces represent 25 per cent of the conglomerate's sales from Jamaica to the North American country.

The Canadian market is an important one as well for rum-maker J Wray & Nephew, producer of the Appleton Estate and Wray & Nephew White Overproof Rum brands. Its Appleton Estate brand is the number one gold rum sold in Canada.

What's more is that Purity and Wisynco are among the companies that have targeted the Canadian market for increased exports.

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